York Condominium Corp. No. 78 v. Stein,
2016 ONSC 1837 is a recent decision of the Superior Court
of Ontario which should serve as a reminder that an owner's
right to mediation and/or arbitration under section 132 of the
Condominium Act (Ontario) (the "Act") is not
absolute. In some circumstances, a corporation will be well within
its rights to bring an application before a court without
attempting alternative forms of dispute resolution.
In this case, York Condominium Corp. No. 78 ("YCC 78")
received complaints from the unit owner, Stein, of exterior water
penetration into her unit. Upon investigation, YCC 78 discovered
that Stein had carried out extensive renovations to the unit and
common elements throughout her unit. She had not sought the
permission of the corporation for these modifications, as required
by the Act or the condominium governing documents.
Stein was living in the unit but had "gutted" most of
it. She had no functioning bathroom or kitchen. She had also
replaced most of the wiring and plumbing herself. Many changes
affected the common elements and included:
removal of plaster and insulation from an exterior wall;
installation of an electrical plug box;
removal and reconstruction of electrical and plumbing
removal of parquet flooring (exposing concrete slab); and
the heating radiator system had been tampered with and covered
YCC 78 went to court seeking a
declaration that Stein was in breach of several sections of the
Act. Additionally, it asked the court for a compliance order
granting it access to her unit to restore unauthorized additions
and/or alterations to the unit and common elements.
In court, Stein argued that YCC 78
should not have proceeded to Ontario's Superior
Court of Justice before invoking the mediation and arbitration
processes set out in section 132 of the Act. The court,
however, rejected her argument relying on several prior decisions.
The court was persuaded that the right to mediation and/or
arbitration is more restrictive than many believe. The language in
section 132 only applies to lesser disputes or disagreements
arising out of the interpretation, application, or non-application
of declarations, by-laws, or rules. It does not include breaches of
the Act or disputes relating to it. In contrast, Stein's
conduct amounted to unilateral and unauthorized changes (many to
the common elements) and did not qualify as a lesser dispute for
the purposes of section 134(2).
YCC 78 was granted an order
allowing it to inspect the unit and restore any unauthorized
additions or alterations that had been made to the common elements.
Stein was also ordered to pay the corporation $25,000 in costs.
In deciding how to proceed against a
unit owner, who is in contravention of the Act, or governing
documents of a condominium corporation, do not assume that all
matters must proceed by way of mediation and/or arbitration. Where
appropriate the courts may offer the fastest relief.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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